FAR from the sunny, wide streets of Phoenix, where Waymo’s self-driving taxis ply their trade, a handful of European startups are developing driverless cars to navigate the clogged, chaotic, rain-swept roads of European cities.

Startups such as Oxbotica, FiveAI and Wayve that are testing cars in Britain say the old continent is a unique proposition with quirks and challenges that tech giant Alphabet’s Waymo, Uber, Aurora and others have yet to crack.

Operating on a shoestring relative to their U.S. rivals, the European startups say they have been forced to get creative and focus on cheaper, more tailored technologies that could cope in a heavy downpour on a busy London street.

“A car trained to drive on the wide open highways of Arizona isn’t going to survive on the streets of Croydon. It’s a totally different environment,” said Alex van Someren, venture capital investor at Amadeus Capital, which has a stake in FiveAI.

The startups hope that by developing systems and software that work in the most trying circumstances, they will be in prime position when deep-pocketed U.S. firms expand into new regions to capitalize on a future of self-driving cars.

According to the Boston Consulting Group (BCG), the era of connected high-tech vehicles is expected to generate about US$150 billion of new profits for the auto sector by 2035, making the race to nail the technology a potentially lucrative one.

Some investors estimate a fifth of global new car sales will be self-driving vehicles by 2030.

While only a handful of startups are likely to survive, investors have poured US$70 billion of private investment since 2014 into more than 3,400 firms globally involved in “new mobility,” ranging from autonomous driving to ride hailing to electric scooters to machine learning, according to BCG.

In the English university city of Oxford, Paul Newman founded robotics and self-driving company Oxbotica to develop “universal autonomy” software that could be sold to any carmaker, fleet operator, delivery firm or transport company.

The company has been testing its software in a Ford Mondeo crowned with assorted cameras and sensors on the busy streets of the city. The firm now plans to open offices in North America and China, and aims to launch a self-driving taxi service in 2021 in London on specific routes as part of a consortium working with cab company Addison Lee.

(SD-Agencies)